www.ipsofactoJ.com/archive/index.htm [1980] Part 4 Case 7 [PC]

Appeal No 19 of 1979

THE PRIVY COUNCIL

Coram

LORD DIPLOCK

The “Halcyon Isle”;

Bankers Trust

International Ltd

- vs -

Todd Shipyards

Corporation

LORD SALMON

LORD SCARMAN

LORD ELWYN-JONES 24 JUNE 1980

Judgment

Lord Diplock

(delivering the majority judgment of the Board)

1. The appellants (the mortgagees) are an English bank. They held a mortgage

on a British ship the ‘Halcyon Isle’ registered in London. It was dated 27

April 1973 and registered on 8 May 1974. The respondents (the Necessaries

Men) are ship-repairers carrying on business in New York. They executed

repairs to the ‘Halcyon Isle’ at their Brooklyn yard in New York State in

March 1974. Under United States law a ship-repairer is entitled to a

maritime lien for the price of repairs done to a ship. The ‘Halcyon Isle’ was

arrested in Singapore on 5 September 1974 in an action in rem brought in

the High Court of Singapore by the mortgagees. On 6 March 1975 she was

sold by order of the court, for a sum insufficient to satisfy in full the claims

of all the creditors of her owners. The question of law directly involved in

this appeal is whether in the distribution of the proceeds of sale the claim of

the mortgagees should take priority over the claim of the Necessaries Men

or vice versa.

2. Although the admiralty jurisdiction of the High Court of Singapore is

statutory the order of priorities in the distribution of the proceeds of sale of a

ship in an action in rem or in a limitation action is not. It is a matter of

practice and procedure of that court in the exercise of its admiralty

jurisdiction; and in matters of practice and procedure as well as the

substantive law which it administers there is no relevant difference between

the law of Singapore and the law of England. Since nearly all the cases to be

cited will be English cases, their Lordships will for brevity use the

expression ‘English law’ as embracing also the law of Singapore

administered by the High Court of Singapore in the exercise of its admiralty

jurisdiction.

3. At first sight, the answer to the question posed by this appeal seems simple.

The priorities as between claimants to a limited fund which is being

distributed by a court of law are matters of procedure which under English

rules of conflict of laws are governed by the lex fori; so English law is the

only relevant law by which the priorities as between the mortgagees and the

Necessaries Men are to be determined; and in English law mortgagees take

priority over Necessaries Men.

4. In the case of a ship, however, the classification of claims against its former

owners for the purpose of determining priorities to participate in the

proceeds of its sale may raise a further problem of conflict of laws, since

claims may have arisen as a result of events that occurred not only on the

high seas but also within the territorial jurisdictions of a number of different

foreign states. So the lex causae of one claim may differ from the lex

causae of another, even though the events which gave rise to the claim in

each of those foreign states are similar in all respects, except their

geographical location; the leges causarum of various claims, of which under

English conflict rules the ‘proper law’ is that of different states, may assign

different legal consequences to similar events. So the court distributing the

limited fund may be faced, as in the instant case, with the problem of

classifying the foreign claims arising under differing foreign systems of law

in order to assign each of them to the appropriate class in the order of

priorities under the lex fori of the distributing court.

5. The choice would appear to lie between

a. on the one hand classifying by reference to the events on which each

claim was founded and giving to it the priority to which it would be

entitled under the lex fori if those events had occurred within the

territorial jurisdiction of the distributing court; or

b. on the other hand applying a complicated kind of partial renvoi by

i. first ascertaining in respect of each foreign claim the legal

consequences, other than those relating to priorities in the

distribution of a limited fund, would be attributed under its

own lex causae the events on which the claim is founded; and

ii. then giving to the foreign claim the priority accorded under

the lex fori to claims arising from events, however dissimilar,

which would have given rise to the same or analogous legal

consequences if they had occurred within the territorial

jurisdiction of the distributing court.

To omit the dissection of the lex causae of the claim that the second choice

prescribes and to say instead that if under the lex causae the relevant events

would give rise to a maritime lien, the English court must give to those

courts all the legal consequences of a maritime lien under English law

would, in their Lordships’ view, be too simplistic an approach to the

questions of conflicts of law that are involved.

6. Even apart from the merit of simplicity, the choice in favour of the first

alternative, classification by reference to events, appears to their Lordships

to be preferable in principle. In distributing a limited fund that is insufficient

to pay in full all creditors of a debtor whose claims against him have already

been quantified and proved, the court is not any longer concerned with

enforcing against the debtor himself the individual creditors’ original rights

against him. It is primarily concerned in doing evenhanded justice between

competing creditors whose respective claims to be a creditor may have

arisen under a whole variety of different and, it may be, conflicting systems

of national law. It may be plausibly suggested that the moral and rational

justification of the general conflicts of law rule, applied by English courts to

claims arising out of foreign contracts, that the contract should be given the

same legal consequences as would be accorded to it under its ‘proper law’,

is that the legitimate expectations of the parties to the contract as to their

rights against one another, which will result from entering into and carrying

out the contract, ought not to be defeated by any chance of the forum in

which such rights have to be enforced. Rights of priority over other creditors

of the defaulting party to such a contract, in a judicial distribution of a fund

which is insufficient to satisfy all the creditors in full, are not, however,

rights of the parties to the contract against one another. They are rights as

between one party to the contract against strangers to the contract, the other

creditors, who have done nothing to arouse any legitimate expectations in

that party as to the priority to which he will be entitled in the distribution of

such a fund. Every such creditor whose claim is based on contract or quasi-

contract must have known that in so far as the legal consequences of his

claim under its own lex causae included rights to priority over other classes

of creditors in the distribution of a limited fund resulting from an action in

rem against a ship, that particular part of the lex causae would be compelled

to yield to the lex fori of any foreign court in which the action in rem might

be brought.

7. Counsel for the Necessaries Men in the instant case, who are experienced

litigants in courts of admiralty, has not suggested that they were not

perfectly well aware of this when they allowed the ‘Halcyon Isle’ to vacate

the berth that she was occupying in their busy repair yard in Brooklyn and

thereby relinquished their possessory lien for the unpaid work that they had

done upon the ship. They would likewise know that if the ‘Halcyon Isle’

were to enter a port in any of the major trading countries of the world while

their bill remained unpaid could have her arrested in an action in rem and in

this way obtain the security of the ship itself for their claim; subject,

however, to being postponed to any other claimants who might be entitled to

priority under the lex fori of the country in which the action was brought.

They or their lawyers, would know, too, that the priorities as between

various kinds of maritime claims accorded by the lex fori were subject to

considerable variation as between one country and another.

8. In the case of claimants to a limited fund consisting of the proceeds of sale

of a ship in an action in rem brought in a court which, like the High Court of

Singapore, applies English admiralty law and practice, the problem of

classifying foreign maritime claims for the purposes of determining

priorities is complicated by the legal concept of ‘maritime lien’ to which

some classes of maritime claims against a ship owner give rise in English

law while other classes do not. This concept derived as it is from the civil

law and not the common law may fairly be described as sui generis.

9. The classic description of a maritime lien in English law is to be found

in The Bold Buccleugh (1851) 7 Moo PC 267; 13 ER 884 a case decided by

the Privy Council at a time when the English Court of Admiralty regarded

itself as applying not so much English law as the ‘general law of the sea of

the whole of Europe’. Sir John Jervis described the concept as having its

origin in the civil law. He adopted as correct Lord Tenterden’s definition of

‘maritime lien’ in Abbott on Shipping, as meaning

a claim or privilege upon a thing to be carried into effect by legal

process

10. and Sir John Jervis added:

This claim or privilege travels with the thing into whosesoever

possession it may come. It is inchoate from the moment the claim or

privilege attaches, and when carried into effect by legal process, by

a proceeding in rem, relates back to the period when it first

attached.

11. The expression ‘privilege’ in this description of a maritime lien is a

reference to the concept of ‘privilege’in the Civil Law from which the

French Code Civil is derived. There, privilege is used in the sense of the

right of a creditor of a particular class to be paid out of a particular fund or

the proceeds of sale of a particular thing in priority to other classes of

creditors of the owner or former owner of the fund or thing. In the French

Code Civil it is distinguished from the concept of ‘hypothèque’, which was

the subject of detailed analysis by the English Court of Appeal in The

Colorado [1923] P 102.

12. Sir John Jervis, speaking in 1851 said that a maritime lien existed in every

case in which the Court of Admiralty had jurisdiction to entertain an

action in rem against a ship. Jurisdiction in rem and maritime lien went hand

in hand. This had been true when the jurisdiction of the Court of Admiralty

was at its lowest ebb in the early years of the nineteenth century as a result

of harassment by the courts of common law. It has remained true in the law

of the USA where today all maritime claims enforceable in rem are treated

as giving rise to maritime liens; but it was no longer true in English law,

even by 1851, after the jurisdiction of the Court of Admiralty had been

extended by the Admiralty Court Act 1840 and the Merchant Shipping Act

1844. Subsequent extensions of jurisdiction in rem in respect of maritime

claims were made by the Admiralty Court Act 1861 and by later Merchant

Shipping Acts until its modern jurisdiction was laid down in the

Administration of Justice Act 1956 which is in the same terms as the High

Court (Admiralty) Jurisdiction Act, of Singapore.

13. During the period that the English Court of Admiralty regarded itself as

applying the ‘general law of the sea’ four classes of claims only were treated

as giving rise to maritime liens on ships, viz:

1. Salvage;

2. Collision damage;

3. Seaman’s wages; and

4. Bottomry. Bottomry is now obsolete, but historically it provided a

normal means of providing security for the price of goods and

services supplied to a ship by Necessaries Men outside its home port.

Two additional classes of claims were added to this list by statute in

the 19th century. These were

5. Master’s wages, and

6. Master’s disbursements.

14. The ranking for the purpose of priority in the distribution of a limited fund

that has been accorded by the English Court of Admiralty to claims within

the various classes that were treated as giving rise to maritime liens was

complicated. It still is. It can be found conveniently set out at paras 1574 et

seq in the volume of British Shipping Laws that deals with Admiralty

Practice. For present purposes it is sufficient to observe that the priorities,

whether between class and class or within one class, bear no relation to the

general rule applicable to other charges upon property as security for a

debt: qui prior est tempore potior est jure. This rule is based upon the

principle that when the owner of a thing grants a charge on it as security for

the payment of a sum of money, he transfers to the grantee part of his own

proprietary rights in the thing and so deprives himself of the ability to

transfer to a subsequent grantee anything more than such proprietary rights

as remain to him.

15. This principle, based as it is upon the concept of a transfer of proprietary

rights, cannot explain the priorities accorded to maritime liens. Indeed a

later maritime lien for one class of claim may rank in priority to an earlier

maritime lien for another class of claim, and even within a single class a

later maritime lien may rank in priority to an earlier one.

16. Thus when Gorell Barnes P in The Ripon City [1897] P 226 at p 242 said

of a maritime lien:

It is a right acquired by one over a thing belonging to another – a jus

in re aliena. It is so to speak a subtraction from the absolute property

of the owner in the thing.

17. The second sentence is inaccurate if it is to be regarded as suggesting that

the owner of a ship, once it has become the subject of a maritime lien, can

no longer create a charge on the whole property in the ship which will rank

in priority to the existing lien. This he can do – as for instance by entering

into a salvage contract or by signing on a crew.

18. In English admiralty law and practice claims of all those six classes that

have hitherto been treated as giving rise to a maritime lien take priority over

claims under mortgages in the distribution of a limited fund by the court,

and mortgages themselves rank in priority to all classes of claims that have

not been treated as giving rise to maritime liens.

19. [In view of the reference hereafter to be made to The Colorado it is also

relevant to note that for the purpose of priority of ranking inter se mortgages

fall into two classes:

. British registered mortgages (which can only be upon British ships)

and

a. other mortgages, British or foreign (which can be upon either British

or foreign ships).

20. British registered mortgages rank in priority to all other mortgages and

rank inter se in order of date of registration. All other mortgages regardless

of whether they are British or foreign rank inter se in order of date of

creation.]

21. The pattern of priorities, which has been applied by the English Admiralty

Court in the distribution of the fund representing the proceeds of sale of a

ship in an action in rem, thus affords no logical basis for concluding that, if

a new class of claim additional to the six that have hitherto been recognised

were treated under its own lex causae as having given rise to a maritime

lien, this should have any effect on its ranking for the purpose of priority

under the lex fori in the distribution of the fund by the court and, in

particular, no logical basis for concluding that this should entitle it to

priority over mortgages.

22. There is, however, an additional legal characteristic of a maritime lien in

English law which distinguishes it from maritime claims to which no

maritime lien attaches and which is not confined to rights to a particular

rank of priority in the distribution by a court of justice of a limited fund

among the various classes of creditors of a single debtor. A maritime lien

continues to be enforceable by an action in rem against the ship in

connection with which the claim that gave rise to the lien arose,

notwithstanding any subsequent sale of the ship to a third party and

notwithstanding that the purchaser had no notice of the lien and no personal

liability on the claim from which the lien arose. This characteristic points in

the direction of a maritime lien partaking of the nature of a proprietary right

in the ship.

23. It is true that in the instant case this complication does not in fact arise; there

had been no change of ownership since the claim of the Necessaries Men

arose. Nevertheless, it would be wrong to overlook this special characteristic

of a maritime lien (for which the French expression is droit de suite) in any

consideration of how a claim, which under its own lex causae would be

treated as having the same legal consequences as those of a maritime lien in

English law, is to be classified under English rules of conflict of laws for the

purpose of distribution of a fund under Singapore law as the lex fori; for a

maritime lien does something more than merely affect priorities.

24. As explained in the passage from The Bold Buccleugh has already been

cited, any charge that a maritime lien creates on a ship is initially inchoate

only; unlike a mortgage it creates no immediate right of property, it is, and

will continue to be, devoid of any legal consequences unless and until it is

‘carried into effect by legal process, by a proceeding in rem’. Any

proprietary right to which it may give rise is thus dependent upon the lienee

being recognised as entitled to proceed in rem against the ship in the court in

which he is seeking to enforce his maritime lien. Under the domestic law of

a number of Civil Law countries even the inchoate charge to which some

classes of maritime claims give rise is evanescent. Unless enforced by legal

process within a limited time, for instance, within one year or before the

commencement of the next voyage, it never comes to life. In English law,

while there is no specific time limit to a maritime lien the right to enforce it

may be lost by laches.

25. If and when a maritime lien is carried into effect by legal process, however,

the charge dates back to the time that the claim on which it is founded arose.

It is only this retrospective consequence of his having been able to enforce

the legal process in a court of law that enables a claimant, whose entitlement

to a maritime lien is still inchoate and has not yet come into effect, to pursue

his claim to the lien, as it were proleptically, in a proceeding in rem against

the ship; at a time when it no longer belongs to the ship owner who was

personally liable to satisfy the claim in respect of which the lien arose.

26. This characteristic of a maritime lien is one that is unique in English law. It

has the result that the recognition of any new class of claim arising under

foreign law, as giving rise to a maritime lien in English law because it does

so under its own lex causae may affect not only priorities as between classes

of creditors of a particular debtor in the distribution of the proceeds of sale

of a particular ship in an action in rem, but such recognition may also extend

the classes of persons who are entitled to bring such an action against a

particular ship, i.e. by including among them some who, although they have

no claim against the current owner of the ship, have claims against his

predecessor in ownership.

27. But any question as to who is entitled to bring a particular kind of

proceeding in an English court, like questions of priorities in distribution of

a fund, is a question of jurisdiction. It too under English rules of conflict of

laws falls to be decided by English law as the lex fori.

28. Their Lordships therefore conclude that, in principle, the question as to the

right to proceed in rem against a ship as well as priorities in the distribution

between competing claimants of the proceeds of its sale in an action in

rem in the High Court of Singapore falls to be determined by the lex fori, as

if the events that gave rise to the claim had occurred in Singapore.

29. Although in the English cases involving claims to maritime liens, which

extend over a period of a century and a half, there is no apparent recognition

in the judgments that any hidden problems of conflict of laws might be

involved, the English Courts of Admiralty have consistently applied English

rules as to what classes of events give rise to maritime liens wherever those

events may have occurred. Not one single case has been drawn to their

Lordships’ attention in which it has been treated as relevant that a

transaction or event did or did not give rise to a maritime lien under the law

of the country where the transaction or event took place; even though the

judges of the Court of Admiralty were fully aware that under the law of

many European countries claims falling outside the six classes recognised

by English law were treated by those countries’ courts as giving rise to

maritime liens. Claims for the supply of necessaries provided the most

widespread example of foreign recognition of a maritime lien, but, under

French law in particular, a wide variety of other maritime claims were

treated as giving rise to privileges, i.e. maritime liens.

30. To take an early example in The Golubchick (1840) 1 W Rob 242 the

English rule was applied by Dr Lushington to claims for wages by Spanish

seamen engaged on a Russian vessel. In The Pieve Superiore(1874) LR 5

PC 482 the Privy Council in the course of its judgment stated as self-evident

that cargo claims against an Italian vessel did not give rise to a maritime

lien. The Milford (1858) Swa 362, The Tagus[1903] P 44, The

Zigurds [1932] P 113 and The Acrux [1965] P 391 are supporting

authorities, spanning a century, in which the court has applied English rules

as to the existence and extent of maritime liens and not the differing rules

which would have been applicable under the lex causae.

31. The statutory extensions by the Admiralty Court Acts 1840 and 1861 of the

jurisdiction of the English Court of admiralty to entertain actions in

rem ships in respect of claims of most of the kinds now listed in the current

Singapore and English statutes, including claims by Necessaries Men, might

have been regarded as entitling these new claims to maritime liens. Under

admiralty practice as it then existed this would have given to them that

priority over mortgagees to which the Necessaries Men in the instant case

would be entitled under United States law. After some early vacillation by

Dr Lushington, however, it was decided by the Privy Council in The Two

Ellens (1872) LR 4 PC 161 that those English statutes did not create a

maritime lien for any of the additional classes of claims over which the

Court of Admiralty had newly been granted jurisdiction, and that,

accordingly, mortgagees had priorities over Necessaries Men. See also The

Pacific (1864) Br & L 243; 167 ER 356. It required an express provision of

an English statute to create a maritime lien for classes of claims other than

those entitled to such liens under what the Court of Admiralty regarded and

referred to as the ‘general law of the seas’. This was done in the case of

masters’ wages by the Merchant Shipping Act 1854, The Salacia (1862)

Lush 545; 167 ER 246 and in the case of masters’ disbursements by the

Merchant Shipping Act 1889 after the House of Lords in The Sara (1889)

14 App Cas 209 had held that the earlier statutes conferred no such lien.

32. In coming to the conclusion in the instant case that, because it would have

given rise to a maritime lien under its lex causae (United States law) to

which effect would be given by an American Court applying US law as

the lex fori, the Necessaries Men’s claim was therefore entitled to the same

priority over mortgages as maritime liens as a class enjoy over mortgages

under the law of Singapore as the lex fori, the Court of Appeal were greatly

influenced by the decision of the Supreme Court of Canada in The Ioannis

Daskalelis [1974] 1 Lloyd’s Rep 174 that under Canadian law, which in

admiralty matters is derived from English law, American Necessaries Men

took priority over mortgagees of a Greek ship. There had been a previous

decision of the Supreme Court of Canada in 1926 The Strandhill [1926] 4

DLR 801 in which it had been held that American Necessaries Men could

proceed to enforce their claim by an action in rem against the ship

notwithstanding a subsequent change in ownership; but this earlier decision

expressly left open the question whether priorities between competing

claims would be determined by Canadian law. A subsequent decision of the

Canadian Court of Exchequer had determined that priorities were to be

determined by Canadian law, The Astoria [1931] Ex CR 195. In

overruling The Astoria the Supreme Court of Canada in The Ioannis

Daskalelis relied strongly on the judgment of the English Court of Appeal

in The Colorado, a case that was not concerned with a claim to a maritime

lien at all.

33. The only question in The Colorado was whether a hypothèque executed and

registered in France over a French ship created a proprietary right in the ship

which the court would recognise as similar enough in legal character to an

English mortgage to justify according it the priority over the claim of

Necessaries Men to which a mortgagee would be entitled in English law.

This is not a problem that would have troubled the Court of Admiralty when

it was manned by civil lawyers; they would have known all about the legal

concept of hypothèque. An examination of the expert evidence of French

law, which can be found in the report of the case in 16 Aspinall’s Maritime

Law Cases, at pp 145–147, discloses that, contrary to what Scrutton LJ said

in The Colorado p 109, a hypothèque does constitute a jus in rem or right of

property in the ship that is created consensually to secure a debt, although,

unlike an English mortgage, it gives no right to take possession of the res.

There is nothing inchoate about it; it requires registration and is enforceable

by judicial sale. It has different characteristics from a privilege in French

law and, what is significant for present purposes, according to the French of

priorities, it ranks behind and not before the claims of Necessaries Men.

34. In The Colorado the court looked at the French law as the ‘proper law’ of

the hypothèque simply to see what its legal nature was. In describing the

right created by hypothèques in French law as being equivalent to a

maritime lien in English law (a passage much relied upon by the Canadian

court) Scrutton LJ can only have been speaking loosely. They have some

characteristics in common; but Scrutton LJ could hardly be taken to have

been suggesting that a hypothèque would take priority over a prior English

mortgage – as it would if it were to be treated by an English court as being a

maritime lien. On the contrary the French law as to the priority of maritime

liens over hypothèques was said by all three Lords Justices to be irrelevant;

nor did any of the members of the court regard their decision as inconsistent

with The Milfordor and The Tagus. Both these cases were cited by

Scrutton and Atkin LJJ in support of their respective judgments.

35. Moreover the same three Lords Justices had in the previous year

decided The Tervaete [1922] P 259 Atkin LJ there says in terms

[The maritime lien] is confined to a right to take proceedings in a

court of law

36. and

The right of maritime lien appears … to be essentially different

from a right of property, hypothec or pledge created by [a]

voluntary act.

37. Scrutton LJ refers to a maritime lien as [emphasis is added]

a privilege or lien .... in this sense, that if the vessel comes within

English territorial waters it may be arrested and the claim or

privilege on it will date back to the time of the lien.

38. Bankes LJ considered that a maritime lien might properly be regarded in one

or other of three ways:

as a step in the process of enforcing a claim against the owners of a

ship, or as a remedy or partial remedy in itself, or as a means of

securing priority of claim.

39. The reasoning of all three judgments is consistent only with the

characterisation of a maritime lien in English law as involving rights that are

procedural or remedial only, and accordingly the question whether a

particular class of claim gives rise to a maritime lien or not as being one to

be determined by English law as the lex fori. Their Lordships, with great

respect, consider that in The Ioannis Daskalelis the judgments in The

Colorado were misunderstood by the Supreme Court.

40. In the instant case the Court of Appeal in Singapore also relied upon

statements on the legal nature of a maritime lien in English law which are to

be found in the judgment of Scott LJ in The Tolten [1946] P 135. That was

an action brought to enforce a maritime lien for damage caused by a ship in

collision with a port installation in Nigeria. Collision damage gives rise to a

maritime lien in English law and in the maritime law of the great majority of

other Western countries, i.e. under what Scott LJ repeatedly referred to in

his judgment as ‘the general law of the sea amongst Western nations’ out of

which, he said, our own maritime law largely grew. Scott LJ in The

Tolten was not concerned with the ‘proper law’ by which the existence or

non-existence of a maritime lien was to be determined, but with a question,

that was purely one of English law as the lex fori – a choice between two

competing rules of English law as to the jurisdiction of English

courts viz the existence of jurisdiction to enforce against a ship which had

come within English territorial waters what was unquestionably recognised

by English law as a maritime lien and the absence of any jurisdiction to

entertain actions concerning foreign land. Scott LJ had participated in the

conferences which resulted in the International Convention on Maritime

Liens and Mortgages of 1926 which the United Kingdom never ratified

because it required member states to create and recognise maritime liens in

favour of Necessaries Men. No-one was better aware than Scott LJ of the

wide departure from what he called the general law of the sea that had

occurred in many western countries as regards the creation of maritime liens

under their domestic law for a whole variety of, claims against ship owners.

France and the United States were conspicuous examples of this. Their

domestic laws provided for the enforcement of maritime liens in respect of

nearly every kind of maritime claim listed in s 3 of the High Court

(Admiralty Jurisdiction) Act, of Singapore. Throughout his judgment in The

Tolten their Lordships think it clear that Scott LJ was treating English law

as the only proper law to determine what kind of transaction or event gave

rise to a maritime lien that an English court had jurisdiction to enforce as

such.

41. In their Lordships’ view the English authorities upon close examination

support the principle that, in the application of English rules of conflict of

laws, maritime claims are classified as giving rise to maritime liens which

are enforceable in actions in rem in English courts where and only where the

events on which the claim is founded would have given rise to a maritime

lien in English law, if those events had occurred within the territorial

jurisdiction of the English court.

42. From principle and authority their Lordships turn finally to the language of

what is now the statutory source of admiralty jurisdiction of the High Court

of Singapore, the High Court (Admiralty Jurisdiction) Act. It is in the same

terms as the corresponding provisions of the English Administration of

Justice Act, 1956 which confer upon the High Court of England its current

admiralty – jurisdiction in rem and in personam. The English statute was

passed to enable this country to ratify the International Convention of 1952

on the Arrest (saisi conservatoire) of Sea-going Ships (The 1952

Convention). The Singapore Act was probably passed for the same purpose

although, in the event, it appears that Singapore has not yet ratified the

Convention. Nevertheless the identical words of the Singapore statute ought

also to be construed in the light of the Convention to which the English

statute was intended to give effect.

43. The list of claims over which the High Court has admiralty jurisdiction

under the statute (maritime claims) reproduces, with one addition relating to

forfeiture and condemnation, the list of maritime claims to be found in the

Convention. The list is both exhaustive of the claims in respect of which the

courts of one contracting party to the Convention may arrest a ship flying

the flag of any other contracting party, and is compulsory upon the court if

invoked by an applicant claiming to be entitled to any of the maritime

claims in the list.

44. The Convention deals with what in civil law countries are treated as two

separate kinds of ‘jurisdiction’ viz:

. jurisdiction to arrest a ship upon the application of a person claiming

to be a creditor of the present or former owner of the ship in respect

of a maritime claim and to release the ship upon the provision of bail

or security sufficient to satisfy a judgment for the claim rendered by a

court of competent jurisdiction (i.e. saisi conservatoire) and

a. jurisdiction to determine the claim on the merits (i.e. sur le fond) and

to order a judicial sale of the ship to satisfy the claim and any other

maritime claims affecting the ship.

45. The concept of ‘saisi conservatoire’ is unknown to English law. In civil law

countries it is not peculiar to maritime law; it applies to other kinds of

movable property. It is a procedure whereby a court, which has no

jurisdiction over a claim ratione causae but within whose geographical area

of jurisdiction property of the defendant to the claim is to be found, may

arrest that property on the application of the claimant and retain it, or any

security provided to obtain its release, in judicial custody to abide the result

of the judgment of another court which does have jurisdiction over the

claim ratione causae. Although generally exercised by one court having

local jurisdiction in aid of another court with local jurisdiction in the same

country, it also extends to ‘saisi conservatoire’ in aid of foreign courts.

46. In English and Singapore law where ‘saisi conservatoire’ is unknown,

jurisdiction in rem to arrest a ship on the application of a claimant and

jurisdiction to adjudicate on the merits of his maritime claim are co-

extensive. The Convention recognises the supremacy of the lex fori in

matters of jurisdiction to adjudicate on the merits by providing in art 7.

The courts of the country in which the arrest was made shall have

jurisdiction to determine the case upon its merits’ (i.e. sur le fond) ‘if

the domestic law of the country in which the arrest is made gives

jurisdiction to such Courts.

[emphasis is added]

47. Leaving aside questions as to the ownership or possession of ships, the

maritime claims appearing in the list contained in the Convention and the

English and Singapore statutes fall into three classes:

. Claims in respect of mortgages or charges on a ship:

a. Maritime claims which in English law give rise to a ‘maritime lien’

on a ship for the amount claimed: and

b. Maritime claims which give rise to a right of arrest of a ship but in

English law do not give rise to a maritime lien.

48. As has been pointed out, apart from questions of priorities, with which the

Convention does not deal at all, an essential difference between claims in

classes 2 and 3, is that claims which give rise to a maritime lien on a ship

may be enforced in rem against that ship notwithstanding that it has

subsequently been sold to a bona fide purchaser for value without notice of

the claim. This is expressly provided for in Article 8 of the International

Convention of 1962 on Maritime Liens and Mortgages which says:

Claims secured by a lien follow the vessel into whatever hands it

may pass.

49. It is this that makes the recognition of types of claims as giving rise to

maritime liens of considerable commercial importance to the market for the

purchase and sale of ships and in the provision of finance for their

construction and acquisition. Article 9 of the Convention of 1952 is

important. Among the maritime nations of the world at the time of the 1952

Convention, there was still no uniformity of recognition of what categories

of maritime claims gave rise to maritime liens. The United Kingdom policy,

reflected in its refusal to ratify the 1926 Convention on Maritime Liens and

Mortgages, had been to keep down to a minimum the number of maritime

liens that should be recognised, so as to prevent what can be described as

‘secret charges’ arising and gaining priority over mortgagees and over

subsequent purchasers for value of the ship. The United Kingdom stood at

one extreme; under its domestic law only six categories of claims, one of

which is obsolete, give rise to maritime liens. The United States stood at the

other; under its domestic law maritime liens are granted for practically all

classes of maritime claims, including even claims for damage to cargo and

for damages for breach of charterparty.

50. Article 2 of the 1952 Convention which confers the right of arrest for claims

other than those arising under mortgages, hypothecations and other similar

charges says nothing about change of ownership of the particular ship

between the time the claim arose and the time of the arrest. This is dealt

with by Article 9 which provides, in the English language version:

Nothing in this Convention shall be construed as creating a right of

action which, apart from the provisions of this Convention, would

not arise under the law applied by the court which had seisin of the

case nor as creating any maritime liens which do not exist under

such law or under the Convention on Maritime Liens and

Mortgages, if the latter is applicable.

[emphasis is added]

51. In the French language version, ‘any maritime liens’ appears as ‘aucun droit

de suite’ – which may be thought to be a clearer expression in the context of

arts 2 and 9.

52. Article 9 of the Convention in their Lordships’ view points strongly to wide

international recognition of the characterisation of ‘maritime liens’ where

this expression is used in the 1926 and 1952 Conventions, as procedural or

remedial only and governed by the lex fori of the country whose courts have

seisin of the case.

53. The English and Singapore statutes of which the subject-matter, be it noted,

is the ‘jurisdiction’ of the court, comply with the requirements of articles 2

and 9 of the 1952 Convention by the provisions appearing in ss 4(2), 3 and

(4) of the Singapore Statute. In general sub-s (2) and (4) confine the

jurisdiction of the court to entertain actions in rem, and consequently the

right of arrest, to ships belonging to the person who was owner of the ship in

respect of which the claim arises at the date when that claim arose; but sub-s

(3) extends the jurisdiction of the court to entertain actions in rem against

the particular ship in respect of which there is a ‘maritime lien or other

charge’ on it for the amount claimed, regardless of who is currently that

ship’s owner. ‘Maritime lien’ as used in s 4(3) should thus be understood in

the same sense as the same expression in art 9 of the 1952 Convention. If so

understood this, in their Lordships’ view, lends support to the proper

characterisation of its legal nature under Singapore law as procedural or

remedial, and thus governed solely by the lex fori.

54. Their Lordships are accordingly of opinion that in principle, in accordance

with long-established English authorities and consistently with international

comity as evidenced by the wide acceptance of the International Convention

of 1952 on the Arrest of Sea-going Ships, the question whether or not in the

instant case the Necessaries Men are entitled to priority over the mortgagees

in the proceeds of sale of the ‘Halcyon Isle’ depends upon whether or not if

the repairs to the ship had been done in Singapore the repairer would have

been entitled under the law of Singapore to a maritime lien on the ‘Halcyon

Isle’ for the price of them. The answer to that question is that they are not.

The mortgagees are entitled to priority.

55. In the instant case as in the two Canadian cases of The Strandhill and The

Ioannis Daskalelis, the claim of the Necessaries Men is for the price of

repairs to the ship. Such a claim, wherever the repairs were done, whether in

Singapore or abroad, may well invite sympathy since the repairs may be

added to the value of the ship and thus to the value of the security to which

the mortgagees can have resort. As a matter of policy such a claim might not

unreasonably be given priority over claims by holders of prior mortgages the

value of whose security had thereby been enhanced. If this is to be done,

however, it will, in their Lordships’ view have to be done by the legislature.

It is far too late to add, by judicial decision, an additional class of claim to

those which have hitherto been recognised as giving rise to maritime liens

under the law of Singapore; nor is this what the judgment of the Court of

Appeal in the instant case purports to do. The argument for the Necessaries

Men that was accepted by the Court of Appeal was not confined to claims

for necessaries. It was that wherever a maritime claim of any of the kinds

listed in paras (d) to (q) of s 3(1) of the High Court (Admiralty Jurisdiction)

Act gives rise to a maritime lien under its own lex causae, as could be the

case with claims of every kind referred to in the list, even including

damages for breach of charter-party if the lex causae was United States law,

the High Court of Singapore is required by Singapore law to give the claim

priority over earlier and subsequent mortgagees and over all claims for the

price of necessaries supplied to the ship in Singapore itself or in any other

country under whose domestic law claims for necessaries do not attract a

maritime lien.

56. For the reasons already given their Lordships consider that this argument is

unsound, and the appeal must be allowed, the judgment of the Court of

Appeal set aside and the judgment of Kulasekaram J restored. The

respondents must pay the costs of the appeal to the Court of Appeal and of

this appeal.

Lord Salmon & Lord Scarman

(dissenting)

57. In this appeal many questions have to be considered, but only one issue

arises for decision. The issue is: when a ship is sold by order of the court in

a creditor’s action in rem against the ship and the proceeds of sale are

insufficient to pay all creditors in full does a ship-repairer, who has provided

his services and materials abroad and has by the ‘lex loci’ the benefit of a

maritime lien, enjoy priority over a mortgagee? Or is his foreign lien to be

disregarded in determining his priority? The issue has arisen in Singapore

but, so far as this appeal is concerned, the law of Singapore is substantially

the same as the law of England. The trial judge ruled in favour of the

mortgagee.

58. The Court of Appeal reversed him, ruling in favour of the ship-repairer. The

mortgagee now appeals to this Board. No question arises as to the

jurisdiction of the court: High Court (Admiralty Jurisdiction) Act s 3(1)(l)

and (m). The one question is the effect within the jurisdiction of a maritime

lien conferred by the lex loci contractus.

59. In The Tolten at p 144 Scott LJ described the maritime lien as ‘one of the

first principles of the law of the sea, and very far-reaching in its effects.’

But, if the appellants are right, a maritime lien is in the modern law no more

than a procedural remedy. So far from being far-reaching, its validity and

effect will be subject to the domestic law of the forum in which it is sought

to be enforced.

60. If this be the law, we have travelled a great distance from the concept of a

universal law of the sea. We have returned to the legal climate which in

England prior to 1840 nourished the common law courts by excluding the

Admiralty jurisdiction from ‘the body of the County’, i.e. the internal

waters, ports and dockyards of the country. In the climate of a dominating

domestic law the concepts and principles of the law of the sea wilt and die.

61. The Court of Appeal in Singapore, allying itself with the Supreme Court of

Canada and accepting the classic description of a maritime lien to be found

in the English cases (notably The Bold Buccleugh) refused to treat a

maritime lien as a mere procedural remedy. Delivering the judgment of the

court, the Chief Justice said:

Apart from authority, we are of the opinion that in principle the

courts of this country ought to recognise the substantive right

acquired under foreign law as a valid right and to give effect to that

recognition when determining the question of priorities between

the ship repairers and the mortgagees of the res.

62. We agree that the issue in this appeal should be approached on the basis of

principle, and we attach great weight to the view of the Republic’s Court of

Appeal as to what the law of Singapore ought in principle to be.

63. The relevant facts are few and can be shortly stated. The ‘Halcyon Isle’ is a

British ship. The appellants, an English company, were first mortgagees and

registered as such on 8 May 1974. The respondents are American ship-

repairers who in March 1974 did repairs and supplied materials to the ship

while it was in the port of New York. The ship reached Singapore waters in

the summer of that year. While there, it was arrested. The ship-repairers had

issued a writ in rem against the ship: so also had the mortgagees. After

arrest, the ship was sold by order of the court. In due course the ship-

repairers obtained a judgment for $237,011 and the mortgagees a judgment

for $14,413,000. The proceeds of the sale amounted only to $1,380,000. If,

therefore, the mortgagees win their appeal, they take all (subject to certain

admitted preferential claims by other creditors). If the ship-repairers are

victorious, they will be paid in full, the mortgagees taking what remains

after the ship-repairers have been paid.

64. First, certain matters which are not in dispute. Under US law a ship-repairer

has a maritime lien against the ship. According to the uncontradicted

evidence of a New York ‘attorney at law and Proctor in Admiralty’ the

rendition by the ship-repairer of services and repairs to the ship ‘gives rise to

a valid maritime lien … which confers upon [him] rights of the same nature

and quality as are conferred upon the holder of a maritime lien under

English law’. It is equally not in dispute that under the law of Singapore, as

of England:

. ‘whatever relates to the remedy to be enforced, must be determined

by the lex fori’: Lord Brougham, Don v Lippmann (1837) 5 Cl &

Fin 1, 13; 7 ER 303;

a. the priority of creditors claiming against a fund in court (including the

proceeds of the judicial sale of a ship) is governed by the lex fori;

b. the claim of a mortgagee has priority over the claim of a ship-repairer

for repairs executed in Singapore;

c. ship-repairers do not have a maritime lien on a ship for repairs

executed in Singapore;

d. a claimant who has a maritime lien recognised by the law has priority

over a mortgagee.

65. These propositions are to be found stated in the Court of Appeal’s judgment

as being not in dispute. They narrow the issue to the question: does the law

of Singapore recognise a foreign maritime lien as a substantive right of

property vested in a claimant who can show that he enjoys it under the law

of the place where he performed his services? The law, admittedly, gives

effect to a validly established foreign mortgage, recognising that the

mortgage is an essential element of the claim. Is a validly established

foreign maritime lien to be treated in the same way, as part of the claim? Or

is it a remedy made available by the lex fori?

66. The law of Singapore follows English law in restricting maritime liens

arising under its domestic law to only a few cases; in modern conditions,

they are for all practical purposes limited to salvage, wages (or salaries) of

the crew, master’s disbursements and liabilities incurred on behalf of the

ship, and damage done by the ship: The Ripon City. Whether it be put in

terms of the law of the sea or of the rules of private international law, the

question has to be asked and answered in this appeal: does English and

Singapore law recognise a foreign maritime lien, where none would exist,

had the claim arisen in England or Singapore? Whatever the answer, the

result is unsatisfactory. If in the affirmative, maritime states may be tempted

to pass ‘chauvinistic’ laws conferring liens on a plurality of claims so that

the claimants may obtain abroad a preference denied to domestic claimants;

if in the negative, claimants who have given the ship credit in reliance upon

their lien may find themselves sorely deceived. If the law of the sea were a

truly universal code, those dangers would disappear. Unfortunately the

maritime nations, thought they have tried, have failed to secure uniformity

in their rules regarding maritime liens: see the fate of the two Conventions

of 1962 and 1967 [Singh, British Shipping Laws (2nd Ed), vol 8 pp 1392,

1397] each entitled (optimistically) an International Convention for the

Unification of Certain Rules of Law relating to Maritime Liens and

Mortgages. Though it signed each of them, the United Kingdom has not

ratified either of them; Singapore (fully independent since 1965) has signed

neither of them. In such confusion policy is an uncertain guide to the law.

Principle offers a better prospect for the future.

67. Against this background the submissions of the parties have to be

considered. The basic submission of the appellants is that in determining

priorities the lex fori looks to the nature of the claim, and has no regard to

the existence, or absence, of a maritime lien. The nature of the claim

determines the priority of the judgment debt founded upon it. The claim of

the ship-repairer is that of a necessaries man and, by the lex fori ranks after

the claim of a mortgagee. The reference in the books to the ranking of

maritime liens before mortgage debts means no more than that the claims

which under the domestic law have the benefit of a maritime lien – notably

salvage, wages and for damage done by the ship – enjoy their priority not

because they have the ‘privilege’ of a maritime lien but because of the

nature of the claims themselves.

68. The respondents submit that a maritime lien is a substantive property right

given by the law as a security for the claim and attaching to the claim as

soon as the cause of action arises, though it does not take effect until legal

proceedings are brought against the ship. They submit that it is as absurd, in

characterising a claim to which the law attaches the security of a maritime

lien, to ignore the existence of the lien as it would be to characterise a

mortgagee’s claim as merely one for the repayment of money lent. In each

the security is part of the nature of the claim. They further submit that both

principle and the weight of authority (which it is conceded is not all one

way) support the view, for which they contend: – that English law has

regard to the maritime lien in determining the nature of the claim. If,

therefore, the court finds that the claim has under itslex loci a valid maritime

lien, the lex fori will give the claim the priority over a mortgagee which it

accords to a claim having the benefit of an English lien.

69. In The Bold Buccleugh Sir John Jervis looked at the maritime law to help

him towards a decision that English law recognised damage done by a ship

in a collision as creating a maritime lien: and this at a time when Parliament

had already intervened to put Admiralty jurisdiction on a statutory basis;

Admiralty Court Act 1840 (3 & 4 Vict c 65). After contrasting a maritime

lien with the possessory lien of the common law, he said that in maritime

law the word [i.e. lien] is used ‘to express, as if by analogy, the nature of

claims which neither presuppose nor originate in possession’. He continued

at p 284:

This was well understood in the Civil Law, by which there might be

a pledge with possession, and a hypothecation without possession,

and by which in either case the right travelled with the thing into

whosesoever possession it came. Having its origin in this rule of the

Civil Law, a maritime lien is well defined by Lord Tenterden, to

mean a claim or privilege upon a thing to be carried into effect by

legal process; and Mr. Story J (1 Sumner, 78) explains that process

to be a proceeding in rem, and adds, that wherever a lien or claim is

given upon the thing then the Admiralty enforces it by a

proceeding in rem, and indeed is the only court competent to

enforce it.

70. In this passage he clearly identifies the origin of the concept in the maritime

law (itself derived from the Roman and the Civil Law), compares it with a

Civil Law ‘hypothèque’, and treats it as going to the nature of the claim. A

little later, he describes it as a claim or privilege which ‘travels with the

thing, into whosesoever possession it may come’ and adds ‘when carried

into effect by … a proceeding in rem, relates back to the period when it first

attached’: pp 284, 285.

71. The subsequent case law has, save in one respect, adopted and developed Sir

John Jervis’s description of the nature and incidents of the maritime lien. Sir

John Jervis (p 284) declared:

that in all cases where a proceeding in rem is the proper course,

there a maritime lien exists: the Admiralty jurisdiction of the

English court has developed otherwise; for an action in rem is

available in respect of claims to which no maritime lien attaches.

72. The history of this development is referred to by Scott LJ in The Tolten, at

pp 144, 145: but he cites with approval the conclusion of Gorell Barnes J

in The Ripon City at p 242:

It [i.e. a maritime lien] is a right acquired by one over a thing

belonging to another – a jus in re aliena. It is, so to speak, a

subtraction from the absolute property of the owner in the thing.

73. The classic cases, from which these quotations have been taken, do not

touch the question that arises in this appeal. The repairs were carried out by

the respondents in the USA under a contract with the then owners of the

ship; this contract was governed by the lex loci contractus, as both parties to

the contract must have known. This law indubitably conferred a maritime

lien on the respondents in respect of their repairs to this ship: otherwise the

respondents would never have allowed the ship to leave their yard without

payment. It is obvious also that these repairs must have added to the value of

the ship and therefore to the value of the security of the appellant

mortgagees.

74. The law relating to the repair of ships in England under contracts governed

by English law differs, however, from that in the USA. The repairers of a

ship in England do not acquire any maritime lien over a ship which they

have repaired; and accordingly they rarely allow the ship to leave their yard

until they are paid, or have arranged other security for the repairs.

75. In England, the lex fori decides the priority of the rights which exist against

a ship, e.g. the rights conferred by a maritime lien taking precedence over

the rights of a mortgagee. The question is – does English law, in

circumstances such as these, recognise the maritime lien created by the law

of the USA, i.e. the lex loci contractus where no such lien exists by its own

internal law? In our view the balance of authorities, the comity of nations,

private international law and natural justice all answer this question in the

affirmative. If this be correct then English law (the lex fori) gives the

maritime lien created by the lex loci contractus precedence over the

appellants’ mortgage.

76. If it were otherwise, injustice would prevail. The respondents would be

deprived of their maritime lien, valid as it appeared to be throughout the

world, and without which they would obviously never have allowed the ship

to sail away without paying a dollar for the important repairs upon which the

respondents had spent a great deal of time and money and from which the

appellants obtained substantial advantages.

77. It is suggested in the majority judgment that the respondents were well

aware that the lex loci contractus, conferring upon them their maritime lien,

was likely to be disregarded by overseas lex fori in its determination of

priorities. We entirely disagree. The importance which the respondents

attached to their maritime lien is clearly shown by the ship repair contract

which included the term:

Nothing herein shall be deemed to constitute a waiver of our

maritime lien.

78. Moreover, in many countries the lex loci gives priority to maritime liens

over mortgages.

79. In our opinion, the respondents clearly relied upon the fact that overseas

the lex loci and the maritime lien which it created would both be respected,

and the lien would be given the priority which it rightly received from the

Court of Appeal in Singapore according to the law of Singapore and of

England.

80. Finally, on this aspect of the matter, it must be remembered that the nations

have failed to introduce a uniform code governing maritime liens. The two

international conventions relating to maritime liens, upon which the

majority places great weight, cannot affect, in our view, the result of this

appeal. Neither of them has been signed by Singapore; and neither of them

ratified by the United Kingdom.

81. It is submitted, however, by the appellants that the weight of authority

supports their case. We do not agree: we think that the contrary is true.

82. In The Milford the question was whether the statute gave a foreign master a

remedy against the freight for his wages. Dr Lushington doubted whether he

was called upon to give any opinion on the foreign law (p 365) and, in the

result, gave none, holding that the 191st section of the Merchant Shipping

Act 1854 gave the master the same right and remedies as seamen have (p

367). The statute gave a remedy; and he applied it. It was not, therefore,

necessary to go into the lex loci contractus. The decision is no authority for

the proposition that an English court will never have regard to the lex loci

contractus in order to determine the nature of the claim for the purpose of

determining its priority, or that, in determining its nature, it will disregard

the existence of a validly created foreign maritime lien.

83. The Tagus also turned on the language of the same statutory provision, by

now s 167 Merchant Shipping Act 1894. The law of Argentina, the lex loci

contractus, gave a privilege on the ship and freight only for wages due for

the last voyage. The British statute was not so limited. It was ‘perfectly

general’ in its terms (p 53). The question is simply one of remedy, and was

recognised as such by Scrutton LJ in The Coloradoat p 108. The

Tagus does not touch on the question any more than does The Milford.

Both turn on the question of remedy. Nobody doubted in either case that the

master had a claim. But in neither case did the court have to consider

whether or not he had under the lex loci a maritime lien (in The

Tagushe plainly had none other than for his last voyage): for he had a

remedy under the statute.

84. Whatever be the true analysis of these two cases, the English law must be

seen as having been settled in favour of paying regard, in appropriate cases,

to the lex loci contractus, if The Colorado was correctly decided. It was a

decision of the Court of Appeal (Bankes, Scrutton and Atkin LJJ). The court

had before it a motion to determine priorities. The competing claimants

were Cardiff ship-repairers and the holder of a French ‘hypothèque’. It was

established that the French courts would give a necessaries man priority

over a hypothècaire. English courts would, of course, do the reverse; for

English law postpones a necessaries man to persons who have what is

equivalent to a maritime lien. The Court of Appeal applied the priorities of

its lex fori, but looked to the French law to determine the nature of the claim

based on a hypothèque. Scrutton LJ at p 109, described the approach of the

courts to the problem in these words:

Now the English Court has claim from an English necessaries man

who has no possessory lien or maritime lien, but merely in England

a right to arrest the ship in rem to satisfy his claim against the owner

of the ship. It has also a claim by a person who has a hypothèque,

and it may legitimately consult the foreign law as to what

a hypothèque is. It is proved to be, not a right of property in the ship,

but a right to arrest the ship in the hands of subsequent owners to

satisfy a claim against a previous owner. But such a right is the

same as a maritime lien as described by Mellish LJ in The Two

Ellens (1872) LR 4 PC 161, by Gorell Barnes J in The Ripon

City [1897] P 226, 242 and by this court in The Tervaete [1922] P

259. And the English Courts administering their own law would

give a claim secured by a maritime lien priority over the claim of a

necessaries man, who cannot arrest the ship against a subsequent

owner. The fallacy of the appellants’ argument appears to be that

because the French Courts would give a French necessaries man, or

a necessaries man suing in the Courts of France, priority over the

claimant under a hypothèque, therefore an English Court should give

an English necessaries man similar priority. The answer is that the

appellants are not asking for French remedies, but English

remedies; and the English law postpones them to persons who have

what is equivalent to a maritime lien.

85. Bankes LJ (p 107) and Atkin LJ (pp 111–112) also looked to the French law

to establish the nature of the claim. Bankes LJ described it as having

attributes which entitled it to rank on a question of priorities in the

same class as a maritime lien;

86. Atkin LJ said it was

a right closely resembling a maritime lien.

87. The case is a neat illustration of the application of two principles of the law.

The Court looks to the lex loci to determine the nature of the claim. Having

established its nature, the court applies the priorities of its own law, the lex

fori.

88. The effect of the decision is succinctly summarised in the 9th Ed

of Cheshire’s Private International Law (p 697):

French law determined the substance of A’s right, English law

determined whether a right of that ranked before or after an

opposing claim.

89. Two more recent cases, however, contain obiter dicta which in our opinion

are inconsistent with the decision in The Colorado. In The

Zigurds Langton J had to consider a submission based on The Colorado. It

was submitted that a German necessaries man had under German law rights

equivalent to those of a maritime lien and should, accordingly, enjoy the

priority given by English law to a maritime lienor’s claim. The judge

negatived the submission as to the effect of German law: but,

discussing The Colorado, he indicated his opinion that English law would

not allow its priorities to be determined by the existence of a foreign

maritime lien where none would be given by English law. However, he

concluded (p 125) that it was ‘idle’ to consider debatable questions as to

maritime liens in other cases since he had accepted expert evidence that

German law gave no analogous rights in the case he had to decide.

90. Hewson J adopted a similar approach in The Acrux. Again the point did not

arise for decision, the question in the case being whether social insurance

contributions required by Italian law to be paid by ship owners in respect of

the crews of Italian ships were to be treated as part of the crews’ wages for

the purpose of determining whether English courts had jurisdiction to

entertain a claim for their recovery under s 1(1)(o) of the Administration of

Justice Act, 1956. The question was as to the meaning of ‘wages’ in the

subsection. Nevertheless the judge went on to consider whether Italian law

conferred a maritime lien on the claim. He found that it did, but expressed

the opinion that it was not one which would be recognised by the English

courts: p 402G. He added, at p 403E:

the categories of maritime lien as recognised by this court cannot, in

my view, be extended except by the legislature.

91. If this expression of opinion be correct, it constitutes a denial of the

approach adopted by the Court of Appeal in The Colorado. It would deny

the courts the opportunity, which was taken in The Colorado, to have resort

to the rules of private international law. And if it be urged that a better result

would be achieved by a new international convention to be accepted by the

maritime nations of the world, we would reply that experience suggests that

such a convention may be a long time coming. Meanwhile the aid of private

international law, slender and inadequate though it is, should not, in our

opinion, be rejected.

92. The difference of approach visible in the English case law is reflected

elsewhere. Since The Colorado was decided, there have been two notable

decisions overseas, which have taken the line, indicated by Langton J in The

Zigurdsand by Hewson J in The Acrux, that the existence of a foreign

maritime lien is not to be considered in determining the nature of the claim,

for which priority is sought. They are Coal Export Corp v Notias [1962]

EA 220 (East African Court of Appeal in Aden) and The Christine

Isle [1974] AMC 331 (Bermuda). But a series of Canadian cases had

adopted The Colorado approach: see particularlyStrandhill v Hodder The

Strandhill) and a decision of the Supreme Court, The Ioannis Daskalelis.

We agree with the Court of Appeal in thinking that the Supreme Court’s

reasoning is very persuasive: and would draw attention, as the learned Chief

Justice did, to a comment of Ritchie J at p 178, where he treated The

Colorado as authority for the contention

that where a right in the nature of a maritime lien exists under a

foreign law which is the proper law of the contract, the English

Courts will recognise it and will accord it the priority which a

right of that nature would be given under English procedure.

93. In our opinion the English Court of Appeal in The Coloradoadopted the

approach which is correct in principle. A maritime lien is a right of property

given by way of security for a maritime claim. If the Admiralty court has, as

in the present case, jurisdiction to entertain the claim, it will not disregard

the lien. A maritime lien validly conferred by the lex loci is as much part of

the claim as is a mortgage similarly valid by the lex loci. Each is a limited

right of property securing the claim. The lien travels with the claim, as does

the mortgage: and the claim travels with the ship. It would be a denial of

history and principle, in the present chaos of the law of the sea governing

the recognition and priority of maritime liens and mortgages, to refuse the

aid of private international law.

94. For these reasons, we think that the Court of Appeal reached the correct

conclusion and would dismiss the appeal.

Cases

Acrux, The (1965) P 391; Astoria, The [1931] Ex CR 195; Bold Buccleugh, The

[1851] 7 Moo PC 267; 13 ER 884; Christine Isle, The [1974] AMC 331; Coal

Export Corp v Notias [1962] EA 220; Colorado, The (1923) P 102; Don v

Lippman [1837] 5 Cl & Fin 1 13; 7 ER 303; Golubchick, The [1840] 1 W Rob

143; Ioannis Daskalelis, The [1974] 1 Lloyd Rep 174; Milford, The [1858] Swa

362; Pacific, The [1864] Br & L 243; 167 ER 356; Pieve Superiore, The (1874) 5

LR PC 482; Ripon City, The (1897) P 226; Salacia, The [1862] Lush 545; 167 ER

246; Sara, The (1889) 14 App Cas 209; Strandhill, The [1926] 4 DLR 801; Tagus,

The (1903) P 44; Tervaete, The (1922) P 259; Tolten, The (1946) P 135; Two

Ellens, The (1872) 4 LR PC 161; Zigurds, The (1932) P 113

Legislations

High Court (Admiralty Jurisdiction) Act: s. 3

Administration of Justice Act 1956 [UK]: s. 1

Admiralty Court Act 1840 (3 & 4 Vict c 65) [UK]

Merchant Shipping Act 1854 [UK]

Merchant Shipping Act 1889 [UK]

Merchant Shipping Act 1894 [UK]: s. 167

Authors and other references

Singh, British Shipping Laws (2nd Ed), vol 8

Cheshire’s Private International Law, 9th ed

Representations

Michael Thomas QC & Simon Gaunt (Linklaters & Paines) for the appellants.

RF Stone QC & Jervis Kay (Thomas Cooper & Stibbard) for the respondents.

Notes:-

This decision is also reported at [1980] 2 MLJ 217 & [1980] 3 All ER 197.